“Crouching Tiger, Hidden Dragon,” starring Asian movie idols Michelle Yeoh and Chow Yun Fat, is an epic blend of Eastern serenity and Western adrenaline. Set in ancient China, the film begins with cloaked figures running up walls and ends with an exhilarating fight over a forest of bamboo trees. Not in the trees, on top of them. The story follows an unruly teenage girl (newcomer Zhang Ziyi, 19), secretly a martial-arts prodigy, who flees her marriage to live a warrior’s life. Yeoh (“Tomorrow Never Dies”) and Chow (“Anna and the King”), as her would-be mentors, try to bring her back. Along the way, there’s a rich interlude in the Gobi Desert, a stolen sword that goes shhhing! whenever it’s unsheathed and, naturally, about two dozen royal butt-kickings. The film has already set box-office records in Taiwan, Singapore and Malaysia. It drew standing ovations at every major film festival, even the stuffy ones like Cannes. In fact, as far as U.S. audiences are concerned, it’s missing only one thing: English. “This is good for American kids,” Lee jokes. “It’s a big world out there. Read subtitles.”

In fact, the language may not be such a barrier after all. Says Paul Dergarabedian, of box-office analyst Exhibitor Relations, “This film is so visually stunning that after the first fight scene, people won’t even notice thesubtitles.” Roberto Benigni’s Oscar-winning “Life Is Beautiful” grossed $57 million–a massive total for a foreign film–and even that could be within reach. Still, U.S. distributor Sony Pictures Classics isn’t taking any chances. For six months it’s been showing the film to every influential group it can think of: hip-hop artists like the Wu-Tang Clan, baseball’s Mets and Yankees, the brass at MTV and BET, female athletes and CEOs (“because,” says studio chief Tom Bernard, “the women kick the most a– in this film”). So far, it’s working. When “Crouching Tiger” arrives in U.S. cities this month, it’ll find the Oscar machine already humming.

“This film is my boyhood fantasy come true,” Lee says, then laughs. “And my midlife crisis.” Lee, 46, who lives in White Plains, N.Y., with his wife and two boys, has spent the year circling the globe for “Crouching Tiger,” and his tired ankles are stinging with tendinitis. But he’s relaxed now, sitting on the back patio of a house Dartmouth has lent his family for the weekend. The patio overlooks a lovely pond, and every so often Lee picks up a fallen leaf and tears it into little pieces. “Somehow,” he says in his clear but accented English, “I always thought it might take me six films to get here, to even begin to learn how to do it.”

It’s true: there’s nothing in Lee’s previous credits that suggests he had this in him. So far he has done his best work on quiet, indoorsy movies, crafting tiny gems in the kitchen (“Eat Drink Man Woman”), the drawing room (“Sense and Sensibility”) and the bedroom (“The Ice Storm”). But as a teen growing up in Taiwan, Lee was obsessed with the classic wuxia (warrior class) movies by Asian auteurs like King Hu. Then, in 1995, a friend told Lee to read a five-part book written by pulp novelist Wang Du Lu. Lee loved the fourth part, “Crouching Tiger, Hidden Dragon.” It featured strong female characters–a staple of his films–and a pair of couples torn between honor and desire.

By the time Lee’s frequent collaborator, writer and producer James Schamus, had a script ready, the stars had aligned. “The Matrix” had just arrived, and suddenly martial arts was the reigning action esthetic in American movies. These days, even Charlie’s Angels know kung fu. Despite a tight budget–just $15 million–Lee competes admirably with Hollywood. It helps that he brought in “Matrix” choreographer and Hong Kong legend Yuen Wo-Ping, but equally important was his decision to trade costly style for thrifty substance. “In other movies, flying is an effect,” Lee says. “But here it’s part of the storytelling.” Yeoh’s character, Shu Lien, for example, is practical and duty-bound; she can fly only in brief leaps. But Chow’s Li Mu Bai, an enlightened master, takes off as effortlessly as a bird.

The actors, both accomplished action stars, make it look easy. It wasn’t. Just a few weeks into shooting, Yeoh crumpled to the ground with a busted knee. Landing after a kick, she tore a ligament clean through when a stuntman accidentally clipped her balancing leg. (He’s dead now, Yeoh jokes: “We pitched him off the roof.”) She was sidelined for three months, but her presence still came in handy in keeping the local officials at bay. “She’d help us out by socializing with them,” Lee explains. “You know–drinking. Lots of vodka.” When Yeoh finally rejoined the cast, her doctor met with Lee and explained that if she suffered any more damage to her knee, she’d spend the rest of her life limping. Lee paused for a moment. “Pain is only temporary,” he said finally. “Celluloid is forever.” Ha-ha. Funny joke, right? “He was not joking!” Yeoh says, laughing. “The doctor was mortified. But I felt the same way as Ang. Once it’s up on screen, that’s it.”

It was Yeoh’s first glimpse of the hidden dragon–or is it the crouching tiger?–inside Lee. But it was only a matter of time before it pounced. Lee isn’t one to lose his temper. He hates even raising his voice. But he’s already a legend among actors for having the delicacy of a freight train. Most famous is the time during the making of “Sense and Sensibility” when he instructed Emma Thompson, “Don’t look so old.” (In fairness to Lee, Thompson was 36 and playing a 19-year-old. But still.) Schamus jokes that Lee gets away with his “bloopers” because of his accent: “I told Emma that if I ever said that, my head would be on a platter. Ang says it, and they’re sending flowers to his trailer.”

Asked to describe Lee’s directing style, Yeoh laughs and cracks an imaginary whip. But then she praises him for making her into something she’s never felt like before: a dramatic actress. “He wasn’t bringing me in to do the punch, punch, punch and then watch everyone else–which is what normally happens,” Yeoh says. “He told me this would be ‘Sense and Sensibility’ with martial arts. And he kept his word.” Lee doesn’t try to defend his occasional bloopers. “I have to choose sometimes between being a good person and a good director. If the movie’s not good, we’re all disappointed. And that’s a much bigger loss.” No such worries this time–though Lee still sees room for improvement. “Not everything was perfect,” he says. “We’re not limitless. We do live in a world with gravity.” Obviously somebody hasn’t been watching his own films.